UPDATED: TVC Production industry on alert as national advertisers to convene on how to regulate ‘growing commercial production costs’
UPDATED – The AANA (Australian Association of National Advertisers) will lead an effort to control “growing commercial (including TV) production costs” as new media and new technologies challenge the traditional production model.
Says Scott McClellan, CEO, AANA: “The days of the million dollar production as the accepted norm in our industry appear to be coming to an end. Advertisers are increasingly turning to innovative, lower cost production and distribution techniques to reach their target audience.
“As advertiser budgets come under renewed pressure in a tough trading environment, AANA members are saying it’s time to take a critical look at the commercial production process, clarify cost structures and define the cost implications of new production technology.”
National advertisers will convene at AANA in Sydney on July 25th to share ideas and benchmark against global best practices for managing production in the new media environment. Industry trends nationally and innovative practices will also be considered. The agenda for the session will include:
- Changes to the production process, including roles and responsibilities of marketers
- Talent costs in “New Media” platforms
- Adapting global creative for localised needs
- The production process for social media and digital
- Best practices for working with agencies on productions
- Best practices for managing production in the new media environment
- Industry trends and innovations
AANA will aim to develop checklists and tip sheets to assist marketers in maximising ROI in this area.
In response, Ian Fowler (left), the head of The Commercial Producer’s Council and executive producer of @radical.media, Sydney, welcomes Scott McClellan’s comments: “The Commercial Producer’s Council welcomes Scott McClellan’s comments and look forward to the opportunity to discuss the issues facing our business with the AANA. Whilst it seems a lot of Scott’s comments are directed at agencies, we are always looking at ways to deliver better value to advertisers.
“Competition has never been more intense in the production side of the business and the high Australian dollar has brought many international players into the market to try their hand at the high end creative work that Australia produces.
“This high level of competition has forced prices down steadily in real terms over the last ten years. Various cost controllers have pored over and pulled apart budgets but at the end of the day, when a compelling director’s treatment combined with a clever production plan provides an agency and advertiser with an irresistible solution to their brand building plans, the cost of production is nearly always seen as great value for money.
“In terms of the changing transmedia landscape, Scott is right on the money. The challenges are great. So too are the opportunities. As many brand building projects move online much of the media money saved will move into production allowing the often longer stories to be told at the level of quality consumers demand.”
27 Comments
Is this the final insult to Creative Agencies and The Production Industry? Or is it a joke?
Why has it always been this way. Media spending goes unquestioned, but production spending gets slammed? Yes, we have to get smart about production costs, but the smaller the media budget the better the ad has to be to get noticed.
Growing production costs? If it wasn’t so sad it would be hilarious. Try spiralling media/research/strategy costs.
Really old news:
TV commercial production industry costs across the board have going south for the last 15 years. Let it go, there’s not much left to discuss.
Growing commercial production costs or rapidly decreasing budgets? Think this headline might need reworking.
And then a few stories along we see a media booking company flying a team of people to NYC for a dinner with Mr Big…..hello? Clients? Not the norm in TVC production!!
Where is the comment from our vaunted Communications Council?
This is a naked attack on the creative industry, and not so much as a whisper from any of the national board? You’d think that at a minimum this would rate a comment somewhere from the lone member of the production industry on the board of this toothless organisation, wouldn’t you, Michael?
As a constructive comment, perhaps looking at the US model, where agencies take over post is the smart move forward?
The wasted hours/days/costs while conflicting creative views are thrashed out after the shoot would be short circuited by the creative decisions being the sole responsibility of those that conceive the work.
Some VFX and specialist jobs aside, the director, as well meaning as they might be, seem to forget that the TVC isn’t their own private film project.
The US model is ridiculous, creatives are not directors, there is a reason you hire them and generally they are paid on a per shoot day basis therefor not impacting on the time it takes to post produce spots. The creative ends up getting watered down 9 times out of 10 with the clients influence to something that never even resembles the original boards.
Markup in production companies are not going up, nor are fees, most peoples incomes have decreased over the past five years. The problem is agencies farm out jobs with not the right amount of money to make their overbaked ambitious projects and if one company can’t do it you can guarantee that some schmuck will do it for no money, no fees and no mark up.
I also suggest that for any ‘charity jobs’ that prod co’s are supposed to do for nothing, that the creatives involved may like to chip in part of their salary also, as the producers, directors and crew will be struggling to make their mortgage payments that month, while you lot still walk away with the same amount in your bank account each month.
This ‘new media’ talk is all well and good, but if you want quality storytelling with a filmic look you are stuck with the ‘traditional production model’.
What a bunch of arse.
Dear AANA L
I wasn’t suggesting creatives direct the work. On the contrary, I know the value a good director adds.
But when it comes to post/finsihing, hand it over and let the agency creative finish the job. Then the director is free to move onto other work
Not sure the watering down is as accurate as you make out.
And yes, I work in post and like you, fees have only reduced in real terms for many, many years.
Yes interesting. I did just see this. I understand the AANA wanting to look into all cost areas of commercial communications and i dont have any issue that. However, i do think this particular release is not helpful to all of us that are doing the work. I think its hard to generalise about production costs, its like saying that the national cost of cars is too high when the truth is there are different kinds for different uses. We are making low cost documentary work which can suit the online platforms and equally we are making the high impact work that is punching through the broadcast clutter. Both these are entirely valid and entirely different and have great effect if done well. Some of the most successful stuff we have ever done has spent significant and effective money on production and the earned media has been well into the millions…….because the production was good……people wanted to see it. i think that we need to make the most compelling work of our industry’s history right now – if you do something it needs to be as great as it can be otherwise forget it. From a CPC point of view, I would welcome a conversation with AANA as i think we all want to make work that WORKS and that can mean 50 grand or 2 million dollars and it really depends on the project itself and the objectives and mechanisms of the client demands. Lastly, Please lets move on from anonymous posts. its so average. m
Dear Duck for Cover,
Don’t you think directing includes posting the work? You don’t get Scorcese to direct a shoot then walk away, that would be just, well, dumb.
You may work in post, which is great, so would like to think you would have a bit more understanding of the process. Yes we are making ads, and the above reference may be a bit of a stretch, however, that is what a real director does. And honestly, if you are not are a creative, why the issue?
I have produced dozens off offshore spots, seen the treatment, the boards, and the end result, so think I am in a reasonable position to make this judgement, sitting in a dark room all day – not so much.
@Michael Ritchie
Thank you for your insightful remarks. We look forward to your taking them directly to Scott McClellan and the AANA at their conference.
Just a reminder that it was an anonymous post that seems to have spurred you to comment on their press release. Would you have done so publicly without the prodding?
Would one of your industry peers, fellow EPs have prodded you publicly to make a comment? They may have had a private discussion, but we’ve seen no posts from any of these individuals, at least none with their names attached. Yours is a very public role in the CC and dedicated to speaking for the industry as a whole on matters of concern, and the language used by the AANA and the stated agenda for their conference would appear to be a matter of some concern to many of us.
The fact is that the protection of anonymity has provided the opportunity for comments by individuals about an issue of some importance, as it so frequently does here on this blog. You may find that anonymous posts are ‘so average’, but they arguably serve a valuable function when they bring above average people like yourself into a discussion they might otherwise have avoided. As many others have argued in the past when anonymity was challenged here and elsewhere, stop attacking the messengers, who are in the end irrelevant to the discussion, and respond to the messages. Anonymous has the capacity to speak truth to power in a way that other options do not.
Fair call industry. i appreciate you drawing my attention to it as someone told me that I was was earmarked so i then looked at the posting. But in honesty, I still think you can put your name to it and i honestly dont see why you wouldnt and i say that as a general comment. I think the rhetoric seems to quickly become venomous and not constructive.
To be really honest, i dont mind so much what you have done, its fine, but i really do hate the blog when it destroys work and the people that valiantly do their best to make it. It makes me sad and i genuinely worry about how lame it makes us all look as an industry. Anyway, back to the issue, We are adamant to engage with this production debate. BTW, i am not head of the CPC (commercial producers council), Ian Fowler from Radical is, but i was happy to comment as a member of it. BTW are you a member. call me sometime and we can talk about it. Cheers
Just give them a budget figure and work to it.
You won’t get ‘more for less’, just ‘less’.
Tips:
Take your own lunches.
Catch public transport.
Get your mum to direct it.
Use your own camera it probably shoots HD.
PS You will get what you deserve.
How many times has this old chestnut been flogged. Boring.
I agree with “Seriously’. You get what you pay for. Hire the people to suit your budget & let them get on with it. Free market competition sorts the $$ for you. You can get 10 quotes if you want.
There’s no industry body or collusion protecting the production companies…they live from job to job and take on a lot of risk. Plus they all under cut each other. They regularly go bust. What do the AANA need a meeting for? Clients and agencies are laughing all the way to the shoot…
PS: Can we assume this means cost controllers aren’t doing their job. What value do they add? Or do they just increase costs for the client and take the $$ off the screen? What’s the ROI of a cost controller?……one for the AANA ‘tip list’.
who is a member of the CPC?… does it really represent the prod co’s …or is just some of the Sydney based guys all meeting and thinking they rep prod co’s in Brisbane, Melbourne, Adelaide and Perth?
@ Bono and Michael
If the CPC, whomever the members are, and it should be everyone in order to be effective, were to be as cohesive, as organised, and as active an industry body as the AANA on the client side, then perhaps they’d be publishing a release about their counter conference with the agenda of maintaining budget standards and working conditions in the industry for all of the talented people who earn a living here.
Instead, the commercial producers play into the hands of the AANA and their agencies by cutting one another’s throats in a ruthless competition to the lowest costs, in the process forcing greater and greater pressures upon their crews and suppliers, the results of which is an industry full of creative people who are struggling to survive, and a general quality to the work that comes out of this country that is markedly lower than it has been.
How many of the members of the CPC have for cost purposes, and to satisfy agency demands for meet lower budgets shot a larger and larger percentage of their commercials in New Zealand in this past year, or the Czech Republic, or Chile, Argentina, Romania, and who is addressing the issue of runaway production for the Australian industry?
@ The Industry – please tell me that you are a member of the CPC…they need a voice like yours.
The Commercial Producer’s Council welcomes Scott McClellan’s comments and look forward to the opportunity to discuss the issues facing our business with the AANA. Whilst it seems a lot of Scott’s comments are directed at agencies, we are always looking at ways to deliver better value to advertisers.
Competition has never been more intense in the production side of the business and the high Australian dollar has brought many international players into the market to try their hand at the high end creative work that Australia produces.
This high level of competition has forced prices down steadily in real terms over the last ten years. Various cost controllers have pored over and pulled apart budgets but at the end of the day, when a compelling director’s treatment combined with a clever production plan provides an agency and advertiser with an irresistible solution to their brand building plans, the cost of production is nearly always seen as great value for money.
In terms of the changing transmedia landscape, Scott is right on the money. The challenges are great. So too are the opportunities. As many brand building projects move online much of the media money saved will move into production allowing the often longer stories to be told at the level of quality consumers demand.
@Ian
You welcome McClellan’s comments? Have you read their agenda?
-Changes to the production process, including roles and responsibilities of marketers
-Talent costs in “New Media” platforms
-Adapting global creative for localised needs
-The production process for social media and digital
-Best practices for working with agencies on productions
-Best practices for managing production in the new media environment
-Industry trends and innovations
The squeeze on talent, the squeeze on production, the use of offshore work adapted to Aussie needs and eliminating local production, cheaper production for digital media, although the same kinds of stories are being written by creatives, even longer narratives with greater production demands, with crew and lighting and camera platforms (not everything is 5D material) and locations and talent, but somehow it needs to be cheaper because it’s for the web, where there are no real comparable media costs to broadcast work.
And how is the high Australian dollar making it any easier for foreign directors to compete for Australian work when they have travel and accommodation costs to deal with and service companies to pay who cut into the fee sharing with their offshore representation? Of course if an Aussie company is multinational, and without much of an Australian roster to speak of in light of recent events, then it’s understandable how those ‘international players’ would become a part of the increased competition, but for the home-grown folk it may be more difficult to fathom.
“As many brand building projects move online much of the media money saved will move into production allowing the often longer stories to be told at the level of quality consumers demand.”
Yes, and we’re seeing so much of that media savings for online projects being transferred into the production budgets. Like a dozen two minute web films for a campaign, with the same level of expectation from the agencies as they’ve become accustomed to with traditional broadcast spots of :30 and :60 being budgeted at a tenth of the cost for a single tvc, because it’s only ‘for the web’, as if the means of distribution have anything to do with the means of production. They all require cameras and crew and talent and locations and editing and grading, no?
All while multinational holding companies and agency groups like WPP are earning the highest profits in their history. Hmmmm.
“Of course if an Aussie company is multinational, and without much of an Australian roster to speak of in light of recent events, then it’s understandable how those ‘international players’ would become a part of the increased competition, but for the home-grown folk it may be more difficult to fathom.”
yup…and thats what is leading the CPC.
@Michael and others
One last comment about anonymity on the blog.
Anyone looking honestly at what the anonymity here provides would have to say that while yes there is some measure of idiocy and venom, like any public forum frankly, there is also a fair amount of constructive and intelligently critical comment, much of which would not exist were it not for the safety of anonymity that the blog provides.
As the owner of one of the most successful production houses in Australia, you’re free to put your name to comments you feel need to be made with very little jeopardy, the same as for others like you who are in positions of power in this industry. The majority of your colleagues, however, do not enjoy your degree of security, and the use of their own names to make critical comments and put forward opinions that may have real value, simply because they come from the rank and file, might well damage their abilities to continue working. The anonymity that this forum provides allows everyone to speak truth to power, and to express opinions, whether you agree with them or not, that would otherwise be silenced.
We’re all the better for it.
A larger number than you may realise feel that our industry’s ability to criticise itself is one of its real strengths and not the weakness you suppose. Far from making us look ‘lame’, this open forum reflects our ability to hear points of view, even when they comes to us unvarnished, sometimes rude, and often more direct than is completely comfortable. More importantly, Anonymous strips back the spin that accompanies so much of the PR releases presented here and separates in the end the truly worthy work from the less so by way of a sometimes brutally honest assessment that is nevertheless about as democratic because of its anonymity as one will find.
The solution to the random destructive comments that sadden you is not to restrict speech but to use your own filter to separate the valuable from the noise, otherwise we risk throwing out the baby with the bathwater.
@No Rebuttal – FYI The Commercial Producers’ Council is a sub-committee of the Communications Council. I do feel that some transparency about membership would be good. I have 30 years production experience in all fields of the industry (agency, post, VFX, film co, design) and my offer to participate has gone unresponded to. So, I too am curious about the way membership works, what the group’s objective is and what innovations they are initiating to work with the demands of change.
I do think that the headline of this column is out of kilter with reality. The costs haven’t gone up at all, but there is a problem where one size is perceived to fit all.That’s a double edged sword – some clients expect all sizes to fit all (cheapest solution to work for all needs) and likewise some agencies and some film industry people think the same (high cost to fit for low demand work). Transparency and education has got to assist in some way to enlightening the industry.
I think @Michael Ritchie has shown the most appropriate and realistic comment here – it is about providing the right solution to the right budget.
Any decent creative wants more budget for the production company, as we know we’ll find better directors (and crew) to make our spot shine.
The problem is clients have slashed their budgets by a huge margin. And at first, it may not seem so. We think ‘that’s a great budget’ and then 3 days before shooting we realise they want to cram in an extra 4 15s commercials into the time we allocated for 2 30s.
I’ve personally been actively advocating they reduce the number of spots they run on TV to get a better spot. For example, 5 prime time spots will get us an extra $150k in production.
I hate being the meat in the sandwich, any half decent creative is on the production company’s side. We’re squeezed as much as anyone else, and on behalf of most creatives I know, I’d like to apologise that we all think cinematic shoots can be done on a 5D.
Having said that, if it’s a good script, there’s always someone willing to pull it in under budget and get their name on it – so the only good I can see coming from this is better spots on the reel for all concerned.
@ ‘creative”….very true indeed, but at the end of the day nothing will change (apart from the fact that the budgets will continue to drop.)
There will be a lot of discussion, but at the end of the day the agency will get the job done to keep their client for fuck all money as there will always be some one willing to do it for greatly reduced fees and make minimal prod company mark up just to get work through the door.
If they paid $60K for their last production (due to zero mark up and greatly reduced producer and directors fees) why would they suddenly decide to pay $150K, and pay the crew and production company the money they need to actually make a living from.
Production cost have not gone up, how can they go up when the budgets have dropped about 30% in the last ten years.
If only production companies would all say ‘no you cannot do it for that amount of money’, we would all win but alas this is not and will never be the case.
….and thus budgets will continue to drop.
Agencies are already dropping their pants to outbid their counterparts on pitches.
Production houses are already doing the same to win the right to execute the job.
The margins are already paper thin…
Yet some still feel the need to further regulate…
What does this ultimately mean for the quality of thinking and craft our clients demand?
Will cheaper thinking and now cheaper production mean better results in market?
I somehow doubt it.
Hey, why don’t we put a truckload of money into research to find out!